# In the matter of Affluence Engineering and Enterprises Limited IA (IBC) No. 45 of 2021 in C.P. (IB) No. 231-7-HDB-2020

> NCLT judgment dated 2021-02-23. Citation: TCN-2021-NCLT-02943. The case involves an application (IA No. 45/2021) filed in connection with a Corporate…

- **Court:** NCLT
- **Order date:** 23 Feb 2021
- **Citation:** TCN-2021-NCLT-02943
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/affluence-engineering-and-enterprises-limited-ia-ibc-no-45-of-2021-in-cp-ib-no-2-d4c676ae

## Summary

### Background

The case involves an application (IA No. 45/2021) filed in connection with a Corporate Insolvency Resolution Process (CIRP) initiated via CP (IB) No. 231/7/HDB/2020. The application seeks the withdrawal of the CIRP under Section 12A of the Insolvency and Bankruptcy Code (I&B Code), 2016, read with Regulation 30A of the IBBI Regulations. The CIRP was initiated based on a petition filed under Section 7 of the I&B Code. The Adjudicating Authority admitted the petition on 18.01.2021, appointing an Interim Resolution Professional (IRP) and commencing the CIRP process.

## Facts

Affluence Engineering & Enterprises Limited faced a CIRP initiated by Foster Infin & Trading Private Limited under Section 7 of the IBC. The CIRP commenced on 18.01.2021, with the appointment of an IRP. Subsequently, Affluence Engineering and Foster Infin reached a settlement. Foster Infin submitted Form FA to the IRP, requesting withdrawal of the CIRP. The IRP then filed IA No. 45/2021 seeking withdrawal under Section 12A of the IBC, supported by a settlement deed dated 10.02.2021. The Corporate Debtor's board passed a resolution on 09.02.2021 authorizing Venkata Ramana Reddy Pesaladinne, a director, to file Form FA. The CoC had not been constituted at the time of the withdrawal application. The applicant did not enclose any Bank Guarantee as required under

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can allow the withdrawal of a CIRP application under Section 12A …

**Ratio:** Section 12A of the I&B Code allows the Adjudicating Authority to permit withdrawal of

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**Reasoning:** The court reasoned that since the CoC had not been constituted, the requirement of

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**Interpretation:** Section 12A is interpreted to mean that the requirement for CoC approval is

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**Application:** In this case, because the CoC was not constituted, the court proceeded to

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## Parties

- **Judges:** Bhaskara Pantula…; Veera Brahma Rao…
- **Respondents:** Affluence…

## Timeline

- **2021-01-18 — Admission of…**: The Adjudicating Authority admitted the petition (CP (IB) No.231/7/ HDB/2020) and…
- **2021-02-09 — Board Reso…**: The Directors of the Corporate Debtor passed a resolution authorizing Venkata Ramana…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 12A — (1) Subject to sub](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-12a)

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